Correlation Between SAB Biotherapeutics and Biophytis

Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Biophytis at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SAB Biotherapeutics and Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAB Biotherapeutics and Biophytis, you can compare the effects of market volatilities on SAB Biotherapeutics and Biophytis and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SAB Biotherapeutics with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Biophytis.

Diversification Opportunities for SAB Biotherapeutics and Biophytis

-0.55

Correlation Coefficient

SAB Biotherapeutics  Biophytis

Excellent diversification

The 3 months correlation between SAB and Biophytis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Biophytis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis and SAB Biotherapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SAB Biotherapeutics are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Biophytis go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Biophytis

If you would invest  303.00  in SAB Biotherapeutics on September 24, 2024 and sell it today you would earn a total of  162.00  from holding SAB Biotherapeutics or generate 53.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

SAB Biotherapeutics  vs.  Biophytis

SAB Biotherapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, SAB Biotherapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Biophytis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biophytis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Biophytis is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SAB Biotherapeutics and Biophytis

The main advantage of trading using opposite SAB Biotherapeutics and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Biophytis can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Biophytis will offset losses from the drop in Biophytis' long position.

The idea behind SAB Biotherapeutics and Biophytis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.